Thursday, March 25, 2010

Can Shia LaBeouf Help Shed Light on a Stock Market Manipulation Scheme Involving InterOil and John Thomas Financial?

Oliver Stone film starring Michael Douglas and Shia Labeouf
Updated:

In July 2009, this blog provided detailed evidence of a stock market manipulation scheme involving InterOil (NYSE: IOC), John Thomas Financial, Clarion Finanz AG, and banned stock promoter Carl Caserta. I believe that they conspired to raise the stock price of InterOil's shares to force the conversion of certain outstanding debentures to common stock.

Now it turns out that actor Shia LaBeouf trained at John Thomas Financial to study for his role in the upcoming motion picture "Wall Street 2: Money Never Sleeps." LaBeouf claims that he turned an initial investment of $20,000 into $489,000 while training for his role in the movie. According to an article in today's New York Post by Kaja Whitehouse, LaBeouf is pumping InterOil shares, too:

After preparing for his turn as a hedge-fund trader by visiting trading floors of small brokerage houses, LaBeouf in the April issue of GQ talked up the stock of an oil and natural gas exploration company that has yet to produce any of either.

"IOC's momentum is major, and it will surprise to the upside," LaBeouf said in a text message to the GQ article's author, Adam Sachs, using the trader lingo he apparently picked up while prepping for the film.

The 23-year-old star of the "Transformers" franchise was referring to InterOil, a Canadian firm with the New York Stock Exchange ticker symbol IOC that says it's searching for natural gas and oil in Papua New Guinea.

However, after seven years of exploration and drilling, InterOil has yet to produce any proven commercial oil or gas reserves.

Nevertheless, InterOil's stock is up an astounding 385 percent since the start of 2009 -- a feat critics attribute to InterOil's flurry of uplifting press releases about its drilling and exploration plans.

According to the New York Post:

CAA, LaBeouf's talent agency, didn't return a request for the actor to comment."
Apparently, Shia LeBeouf learned about InterOil from John Thomas Financial. It would be interesting to find out what he knew, when he knew it, and if he traded any InterOil shares. Maybe he can provide details on how John Thomas Financial  pushed InterOil  shares on it's customers? Afterall, LeBeouf learned about how the underbelly of Wall Street operates from John Thomas Financial and other firms to prepare for his leading role in the movie.

For more details, please read my full blog post entitled, "InterOil, John Thomas Financial, and Clarion Finanz: Anatomy of a Stock Market Manipulation Scheme." In that blog post, I documented how InterOil filed a false report with the Securities and Exchange Commission claiming that the company paid no fees for a $95 million convertible debt offering. However, documents submitted in a court case show that Clarion Finanz (a major shareholder of InterOil) had in fact received $5.7 million in fees.

Those same court documents show that InterOil concealed John Thomas Financial's and banned stock promoter Carl Caserta's role in the debt offering. About a year earlier, InterOil told the New York Times that it was not doing business with Caserta.

That deception enabled John Thomas Financial analyst Wayne Kaufman to appear on CNBC and recommend InterOil's stock without accurately disclosing his company's conflict of interest from their prior investment banking relationship with InterOil. John Thomas Financial heavily promoted Wayne Kaufman's CNBC appearance to pump InterOil stock to its customers without disclosing its prior investment banking relationship with InterOil.

Over the next couple of weeks, InterOil shares rose dramatically and the company was able to force the conversion of its debt to equity.

My personal friend convicted felon, turned fraud fighter, Barry Minkow (see disclosure below) is a critic of InterOil's financial disclosures. Additional information on Interoil can be found in Fraud Discovery Institute's InterNoOil website and iBusiness Reporting blog.

Written by:

Sam E. Antar

Disclosure:

I am a convicted felon and a former CPA. As the criminal CFO of Crazy Eddie, I helped Eddie Antar and other members of his family mastermind one of the largest securities frauds uncovered during the 1980's. I committed my crimes, simply because I could.

If it weren't for the efforts of the FBI, SEC, Postal Inspector's Office, US Attorney's Office, and class action plaintiff's lawyers who investigated, prosecuted, and sued me, I would still be the criminal CFO of Crazy Eddie today.

I do not own any InterOil share long or short. However, I assisted Fraud Discovery Institute (co-founded by convicted felon turned, fraud fighter, Barry Minkow) in researching InterOil. In the past, Minkow publicly disclosed being short on InterOil securities.

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